Tokyo Post Files: 320.1 Peace Treaty
Memorandum of Conversation, by the Third Secretary of the Mission in Japan (Finn)
Subject: Japanese Peace Treaty
| Participants: | Ambassador W. J. Sebald |
| Minister John M. Allison1 | |
| Mr. Sadao Iguchi, Vice-Minister | |
| Mr. Kumao Nishimura, Chief of Treaty Bureau | |
| Mr. Richard B. Finn |
1. Mr. Allison stated that he desired to inform the Japanese of the progress of recent treaty negotiations and of the problems and attitudes encountered, particularly during the recent conference in London. The Japanese had been apprised earlier of the general contents of the UK draft and in May working groups from the U.S. and the UK reached agreement on a new revision; several concessions were obtained at that time from the UK—elimination of clauses regarding war guilt, prohibition of nationalistic societies, and protection of Japanese who assisted the Occupation, as well as reduction of the time period in which Japan would be required to extend most favored nation treatment to the Allied Powers, and surrender of the UK claim to the Japanese “gold pot”, the last with the understanding that if necessary the United States would issue a statement to the effect that the United States had already paid much more than this amount for the rehabilitation of Japan and that if anyone should get this gold it was the United States.
2. Mr. Allison commented on the strong feeling in the UK and Australia that prisoners of war should be compensated, adding that the desire of the Philippines for large war indemnities was well known. To illustrate the attitude of both the UK and the Philippines Mr. Allison handed Mr. Iguchi several newspapers and a Hansard report. The problem of relief for Allied prisoners had been under study for some time: it was felt that some means should be found whereby Japan could gain the good-will of countries it would be trading with and at the same time a further expenditure of money would not be required. The solution was devised that Japanese assets in neutral countries and in countries at war with Japan, which the U.S. had earlier desired to return to Japan, might be turned over to the International Red Cross for Allied prisoners of war and their families. Ambassador Sebald noted that the Soviet Union was one of the co-trustees of these assets in neutral countries and that this fact would make return of these assets to Japan more difficult.
[Page 1144]3. Regarding security provisions, Mr. Allison noted that Japan’s power to enter into collective security arrangements was no longer limited by Article 5 to arrangements participated in by one or more of the Allied Powers. This change was the result of an Indian suggestion.2 It was felt that Japan as a sovereign state should be free to make collective security arrangements as it wished and that in fact Japan would desire such arrangements only with the Allied Powers.
4. The UK had also raised questions regarding Japan’s shipbuilding and fishing. The UK desired a limitation on Japan’s shipbuilding capacity, and if such a provision were not formally incorporated into the treaty wanted to discuss with the Japanese the desirability of transfer by Japan of its excess capacity. It was agreed at London that no provision would be made in the treaty limiting Japan’s shipbuilding but that Mr. Allison would discuss with the Japanese Government the question of shipbuilding capacity. The UK also desired an explicit undertaking by Japan that the assurances regarding fisheries made in Prime Minister Yoshida’s letter of February 17, 1951 to Mr. Dulles would be of general application to the Allied Powers and not to the United States alone. Mr. Allison suggested that the Japanese Government might consider issuing such a statement.
5. Mr. Allison raised two other points:
- (1)
- The UK believed that Japan should renounce its rights connected with a Bank for International Settlements, including its shares in the Bank, primarily for the reason that the Bank is an agency for European nations. The U.S. objected to forfeiture by Japan of its BIS shares until written agreement was obtained from the directors of BIS to purchase Japan’s shares. The U.S. then concurred and it was agreed that although no specific provision was necessary in the peace treaty Japan should sell its shares to the directors, perhaps after the signing of the treaty and prior to its coming into effect. Mr. Allison noted that present quotations of BIS share value would indicate a favorable opportunity for sale. The question of whether or not the proceeds from such a sale might be vested as a Japanese asset in neutral countries was raised by Mr. Nishimura and Mr. Allison indicated that the intention was that these proceeds should be made available for Japan; it was agreed that this point should be clarified.
- (2)
- The UK insisted that Japan should be required to renounce its rights arising under the Congo Basin Convention of 1919, and the U.S. finally gave in on this point to insure that other more serious concessions would not be necessary. By renouncing these rights, Japan will lose its preferred position in Congo Basin trade but will not be excluded from such trade. The U.S. as a party to this convention can insure that Japan is not excluded, Mr. Allison observed that this [Page 1145] provision is the only real concession made to the UK in the latest draft.
6. Regarding Chinese participation, Mr. Allison said that he expects a U.S.–UK statement to be made shortly. The UK first suggested that the issue be referred to the Far Eastern Commission but the U.S. opposed this on the ground that FEC control might thereby be perpetuated. Mr. Allison noted that FEC nations are evenly split on the issue of Chinese recognition and that 4 of the nations recognizing Nationalist China have stated their opposition to signing of the Japanese peace treaty by Nationalist China. It was finally agreed that China should not be made signatory to the present treaty and that Japan should be permitted to sign a bilateral treaty with any of the Allied Powers at war with Japan; if such a treaty contained greater benefits, these benefits would have to be conferred on the parties to the present treaty. Mr. Allison observed that Japan need not act on this provision of the draft treaty immediately after the treaty was signed and that it might be better to wait a while before taking steps to sign a bilateral agreement with China. He pointed out that this was a practical solution which had the good effect of showing that other Powers trusted Japan and were willing to allow Japan to exercise its sovereign right in this important matter.
7. Mr. Allison said that two new points regarding reparations had been inserted in the draft treaty, one establishing the principle that Japan should pay reparations and the second providing that Japan would undertake to negotiate with countries which had been occupied and damaged by Japan with a view to rendering them assistance. No amounts were specified. He noted the political importance of the reparations issue in the Philippines and said that probably only Burma in addition to the Philippines would desire to avail itself of this right, although it is possible that Australia on behalf of New Guinea and the UK on behalf of Malaya might claim some reparations. India and Pakistan have indicated that they do not desire reparations. This provision, Mr. Allison emphasized, is primarily a gesture and the nominal nature of such provision has been indicated to the countries concerned.
8. Mr. Allison pointed out that the draft treaty contained no restrictions on Japan’s economic activity except possibly that relating to the Congo Basin, that there were no restrictions on shipbuilding or of a military nature, and that most favored nation treatment had been made reciprocal. He noted that this was comparatively a short treaty running to about 20 printed pages as contrasted with the Italian Treaty of 125 printed pages, and expressed the hope that the draft could be kept close to its present form. He emphasized that the primary objectives were (1) to get a treaty and (2) to create an international [Page 1146] atmosphere in which Japan could be accepted on an equal basis.
9. Several additional points were discussed:
- (a)
- The wording of the provision regarding war criminals has been amended so that Japan now “accepts” the various Allied war crimes judgments.
- (b)
- Several protocols have been placed at the end of the treaty in the form of voluntary declarations by Japan regarding the international agreements it would revive, the care of war graves, and insurance and negotiable instruments.
- (c)
- The British proposal for more detailed wording regarding Japan’s pre-war obligations, including bonds, had been adopted. Compliance with such a provision would facilitate revival of Japan’s international credit.
- (d)
- In response to Mr. Nishimura’s question, Mr. Allison said that the French had not raised the issue of reparations for Indo-China.
- (e)
- Mr. Iguchi said that the draft law regarding compensation for damage to Allied property would be ready tomorrow but that the Diet would probably not be able to act on it until it considered the peace treaty, probably at a special session.
- (f)
- Mr. Iguchi said that Japan’s diplomatic property in neutral countries should be exempted from seizure as in Allied countries. It was agreed that this point should be examined further.
- (g)
- Mr. Allison said the draft treaty would shortly be handed to FEC nations but there was no plan to publish it next week.
- (h)
- Mr. Nishimura raised the question of the opening of the Japanese Overseas Agency at Taipei. Mr. Allison suggested that action on this be deferred for the time being.